Multi-Unit Franchisee Magazine Issue I, 2015 | Page 50

BY EDDY GOLDBERG

FUND-AMENTAL
CHANGE?
Is Aziz Hashim’s new fund for franchisees
a game-changer?

T

ired of paying royalties? How would
you like to get in on collecting them?
That’s one of the reasons—among
many—behind an innovative fund created
to allow multi-unit franchisees to own or
invest in franchise brands.
“If you’re in franchising as a multi-unit
franchisee and have built your enterprise
by paying royalties, it’s a very natural hedge
to have an investment in an entity that’s in
the business of collecting royalties,” says
Aziz Hashim, founder and general partner
of the new fund, called NRD Partners.
Hashim, who has made a career operating restaurant franchises, says he has
been preparing for this new role all his
franchising life. “I’ve entered and exited
14 brands in my career. So in a way I’ve
been practicing as a little mini-private
equity fund anyway. Because that’s what
funds do: they buy an investment, improve
upon it, hold it for a period of time, exit
it for a return, and move on to the next
one. I’ve been doing it as a franchisee for
the past 20 years, and now I’m about to
do it as a franchisor.”
This experience, says Hashim, has
given him a level of comfort in managing deals, underwriting transactions, and
the confidence to take this step. “I think
that’s one of the reasons many of the investors were comfortable investing with
me. They have seen that kind of operation
for many, many years.”
We asked Hashim about the fund—what

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“The idea for the
fund is to provide
superior return rates
for the investors, as
well as for potential
franchisees of the
brands we acquire.
We’re doing it
for both.”

Aziz Hashim

it is, where it’s going, and how it might
change the face of franchising.
Tell us about the fund, and why
you started it. What I did as a multiunit franchisee was to respond to the
current trends in franchising. Some of
that revolves around the fact that it’s
very difficult for potential franchisees to
decipher what represents a good deal for
them. There are too many brands proliferating—it’s become too easy to create a
franchise brand—and people have no idea
on how to truly evaluate and how to invest
in a brand that has the highest degree of
success for them.
So part of the response to that is this
fund I’ve created, with the sole purpose
of identifying franchise companies to take
an interest in or to buy outright that will
offer compelling unit economics and a
good partnership culture between franchisor and franchisees, such that we do
franchising in what we consider to be the
best way possible—an ethical approach to
franchising, if you will. That’s the essential
premise of the fund.
The context of the fund is that most
of the investors are also multi-unit franchisees like me who, for a long time, have
really not had an avenue to invest or to
diversify their capital into the franchisor side of the business. Most of us have
spent our entire career paying royalties
and being a franchisee, but we have not

MULTI-UNIT FRANCHISEE IS S UE I, 2015

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